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Dayton Plans Expansion of Target in State

October 17, 1986|NANCY YOSHIHARA | Times Staff Writer

Dayton-Hudson Corp., which has bought 54 Gemco discount department stores from Lucky Stores, disclosed major expansion plans for Target in California Thursday and increased its five-year spending budget by $1 billion.

The Minneapolis-based retailer said it will spend $5 billion from 1987 through 1991 to add stores to its various chains, with Target and Mervyn's receiving about 85% of the planned investment. A year ago, Dayton-Hudson had allocated $4 billion for expansion from 1986 through 1990.

76 New Targets

Target will open a total of 76 new stores nationwide in 1987, more than double the previously planned 28. Fifty-one of the new stores--the Gemco sites--will be in California. Consequently, Target will have 88 stores in the state by the end of next year, up from 37 today, the company said.

A Target spokesman said two other Gemco stores in Reno and another in Phoenix also will become Target stores.

Dayton-Hudson bought the 54 Gemco stores last week for $374 million. Lucky Stores said it plans to close its Gemco unit by the end of the year as part of an effort to ward off a takeover by New York investor Asher B. Edelman.

Aggressive Plan

Analysts have said it will cost Target $3 million to $4 million to remodel each of the 54 Gemco stores. However, Dayton-Hudson said the increase in the five-year spending plan reflects a more aggressive expansion plan overall, not just in Target.

"We had planned a major expansion over the 5-year period," explained George Hite, a Target spokesman. "Total investment in California is at what was planned, but we are accelerating the investment in the early years."

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